As New York City enters its third phase of reopening next week, the authors of a new report on the economic impact of COVID-19 on the city say there’s real reason to feel a “glimmer of optimism,” especially as the number of new COVID-19 cases in New York continues its steady decline.
However, the report issued by the Center for New York City Affairs on Monday makes its central conclusion clear: New York City is experiencing “deep and enduring unemployment,” with low-income workers of color facing the greatest job losses.
From February to May, the city went from an unemployment rate at a historic low of 3.4 percent to 18.3 percent. The report’s analysis also notes that the city’s unemployment rate would be 26 percent in May if the 380,000 unemployed workers who haven’t looked for jobs during the pandemic were added back in.
The Center also found that unemployment is one-third to one-half higher in the Bronx, Queens, and Brooklyn than in Manhattan, and the City Comptroller’s office estimates that May unemployment rates were about twice as high for Black, Latino and Asian New Yorkers as for White New Yorkers.
Indeed, the latest New York State Department of Labor statistics on unemployment claims, for the period ending June 20, show the five boroughs hemorrhaging jobs, with just shy of 95,000 claims over a two-week period, including 28,000 in Brooklyn, 25,000 in Queens and 15,000 in the Bronx.
No rebound in sight
The report notes a slight job rebound of 42,000 private jobs in New York City in May, which the authors call “unsurprising and underwhelming.” (In May, total payroll jobs were still more than 19 percent below the pre-pandemic February level.)
Due to the particular circumstances of this economic downturn, it’s very unlikely that the city will reverse job loss by the end of the year. According to the report, though it’s impossible to predict, the authors say it’s likely that New York City could end this year with 500,000 to 600,000 fewer jobs than at the beginning of 2020.
After all, the Center’s analysis based on NYS Department of Labor data shows that since February, New York City has faced its sharpest decline in jobs “by far” since the Great Depression. (The Center analyzed the most currently available full unemployment statistics, which spans February through May 2020).
Comparable numbers for June will not be publicly available until July 16.) Total payroll jobs in the city dropped 19 percent since February, right before the coronavirus cases increased rapidly and state-mandated restrictions on businesses decreased economic activity quickly. Additionally, 333,000 independent contractors lost their incomes and filed for Pandemic Unemployment Insurance.
Although industries that continued remotely during the height of the pandemic (like finance, tech, and professional services) also faced 6 percent job loss, shedding 72,000 jobs in the city, industries that largely rely on offering face-to-face services like the restaurant, hotel, arts, and entertainment industries faced the steepest job losses, where two-thirds of workers in those industries lost their jobs on a temporary or permanent basis.
Even as New York City prepares to continue the reopening process, there are crucial barriers to a speedy recovery.
For example, Gov. Andrew Cuomo said Monday that he would announce the decision on whether phase three of New York City’s reopening will include indoor dining on Wednesday, after New Jersey’s governor moved to reverse course on indoor dining reopening citing concerns about outbreaks growing in other parts of the United States.
The public health hurdles alone are significant, especially given the enormous share of job loss occurring in businesses that involve more face-to-face services. But there’s also the potential for even further job loss in local government and sectors reliant on government funding. One out of six jobs in social assistance, mostly nonprofits that provide services under government contracts, were lost, especially in youth services because city budget cuts.
The report emphasizes that federal support is still very much needed to fund public service and other jobs programs and provide fiscal relief to state and local governments so more harmful budget cuts could be averted. If the federal government doesn’t act, cuts to essential public services and employment would be harmful even beyond the public services becoming less available: the report notes that these cuts would “worsen an already bleak jobs picture.”
Nicole Javorsky is a Report for America fellow.